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Brexit: spelling out the consequences

2017-10-29 06:54:37

There is something very odd going on in the media. From several quarters, we are seeing journalists write inanely optimistic scenarios for Brexit which defy logic and almost defeat explanation.

In the Telegraph (no paywall), for instance, we see Dia Chakravarty offer the quintessence of stupidity, suggesting major political events will always come with a period of uncertainty, while its ramifications take shape and the details of the final outcome become clear.

The past few months, she writes, indicate that our economy is resilient enough to weather this period, on which slender basis she suggests we "all just calm down a little".

Then, at the other extreme, we have the Independent with John Rentoul writing that "leaving the EU might not trigger the apocalypse", arguing that "a non-disastrous Brexit would give Theresa May a renewed chance and could even act to firmly unite the Labour Party".

Then, as always, we see the Express, doggedly inhabiting a world of its own, telling us that "'Influential' European companies will push EU leaders into signing good deal with Britain".

In the face of the facts, even speculation of a " non-disastrous Brexit" is bizarre, representing a flight into unreality that belongs in realms of fiction rather than serious journalism. Yet here it is, embedded in UK titles presenting the public with a ridiculous scenario which, if not meant as entertaining fantasy, is a waste of everyone's time.

Even the newspaper which are giving some details on the downside seem to be pulling their punches, viz the Observer today. It list of woes comes down-page tacked on to a story telling us of how Tory donors are telling Mrs May that "no deal is better that a bad Brexit" – despite the ultimate definition of a "bad Brexit" being one in which a deal is not reached.

In a lacklustre catalogue of woes, which lacks any real impact, we learn of European Parliament modelling which suggests that a "no deal" Brexit would increase UK consumer prices by 4 percent in 2030 and wipe 2.4 percent off the UK's GDP. The British Retail Consortium states that the average tariff on food products imported from the EU would be 22 percent, with tariffs on Irish cheddar as high as 44 percent and beef up to 40 percent.

We then learn that financial sector advocacy group TheCityUK warns that EU-related financial services activity, worth about £18-20 billion, could be at risk, along with up to 35,000 jobs. The London First business group said companies had been forced to put investment and recruitment decisions on hold and revise their supply chains or were seeing "reduced demand for products and services".

GuildHE, one of the representative bodies for higher education, said that a "tough immigration policy in the event of no deal… could put our institutions at risk of not continuing to compete successfully in a global field". Then we have the American Chambers of Commerce to the EU saying that leaving with no deal would have "potentially devastating consequences". It added: "Companies would subsequently be forced to make difficult decisions regarding their investments and trading arrangements".

Yet, downbeat though this is, it barely compares with the potential £50 billion in chemical and pharmaceutical exports to the EU that we stand to lose just by leaving the Single Market – even if we get a deal.

However, there seems more to under-stating the consequences of a bodged Brexit than the efforts of a few importunate journalists. There is quite decidedly a direction of travel here, with the media going out of its way to minimise the impact of a "hard" Brexit – that is, when it's not too busy reporting on other issues, the same newspaper that recently wrote of "business brimming with confidence in post-Brexit Britain".

A good measure of the media's reluctance to address the current dire situation is the difference (in tone and content) of its coverage of Ivan Rogers's evidence to the Treasury select committee last week, in marked contrast with Booker's piece in today's Sunday Telegraph.

In his pieces, headed, "The terrible Brexit prophecy of Ivan Rogers is coming true. We should have listened", Booker tells us that, last week, one of the chief spectres at the Brexit feast was Sir Ivan Rogers, who last January resigned as our vastly experienced ambassador to the EU, after warning against "ill-founded arguments and muddled thinking" in our approach to leaving it.

This was just before Theresa May's announcement that we were to leave the single market and the European Economic Area (EEA), to seek a one-off trade deal that would give us the same "frictionless" access to the market we have now.

On Wednesday, writes Booker, Sir Ivan tried to explain to the Commons Treasury committee some of the realities inevitably resulting from our decision to become what the EU classifies as a "third country", with "no more rights than Yemen or Venezuela". And the picture he painted, although diplomatically couched, was devastating.

Allowing for ratification, we effectively now have only a year left for our negotiations. Even the "thousands of pages" required by a "Canada-type" trade deal, giving us considerably less access to our largest export market than we have now, would take years to hammer out.

But the consequences of a "no deal" would be so "dire", "chaotic" and "bloody" as to be unthinkable. We could not hope just to rely on "WTO rules", which are not "rules" at all but merely principles that must govern any trade agreement; and without a deal we would simply drop into "a legal void".

The difficulties of achieving continued access for our exports in pharmaceuticals and chemicals (worth £50 billion a year), food products, "large chunks of financial services", and much else would be insurmountable.

Booker recalls that Sir Ivan tried to discuss other problems, both with and without a deal, such as all the new border controls and infrastructure required not just in Ireland but on the continent. But most of this seemed to pass the MPs by.

When Sir Ivan tried to explain in some detail, based on discussions going back to 2015 with senior figures in the aviation industry, just how flights from the UK to the EU and the US could "cease" overnight, because these are all now legally authorised only by EU regulations that would require incredibly complex negotiations to replace, one MP simply cut him short in order to change the subject.

Yet, as Booker notes, elsewhere in the Commons the same day, David Davis, the Brexit Secretary, was airily assuring another committee that, however slowly the negotiations might seem to be dragging on, from the way the EU works, everything will inevitably get happily sorted out "at the 59th minute of the 11th hour".

From stray hints, it did seem Sir Ivan was aware that virtually all the problems he was discussing could have been avoided if only we had joined Norway to remain inside the EEA. But undoubtedly his underlying message throughout was that we have now set our different course and will just have to learn to live with the consequences: however "dire", "chaotic" and “bloody" they may be.

Yet, until today, nothing of this will have reached the public via the legacy media. On the day that Sir Ivan gave evidence, it focused mainly on the Westminster soap opera of the Brexit vote promise, heedless of the growing possibility that there would not be a deal for MPs to vote on.

We are reminded, though, that the reluctance of the media to address reality is not entirely new. When Sir Ivan first gave evidence in January, the Telegraph was quick to demand that he "should be replaced by someone who is positive about Brexit".

The Mail was equally quick to report that the "knives were out" for Sir Ivan, with "Eurosceptics" calling for him to be replaced by a diplomat who was pro-Brexit after he had predicted that negotiating a trade deal could take as long as ten years. Its matching opinion piece was headed: " Memo to the Foreign Office - stop whining and back the UK".

Here, it is almost as if the media is taking an old-fashioned jingoistic view that to criticise the government's handling of Brexit is somehow unpatriotic and that, in its battle with the "enemy" – as Hammond put it – we must show a united front.

Whatever their actual motivation, the media – and the politicians – are doing us no favours by downplaying the effects of a "hard" Brexit, or even the effects of leaving the Single Market. Certain consequences are easy to predict, simply be reference to EU sectoral rules for treating imports from "third countries". To point out factual evidence can hardly be "unpatriotic" or even, for that matter, pessimistic.

If the country – its will divined by whatever means – is determined to embark on a "hard" Brexit, then no doubt we will deal with the consequences. But the one thing that should happen is that those consequences should be spelled out, clearly and in detail.

That, last Wednesday, was what Sir Ivan Rogers was trying to do. The determination was the media to ignore his warnings was beyond irresponsible. It was downright dishonest.